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MACKAGE x HUDSON

BAY COMPANY

Devon Balcain
Linh Dinh
Olivia Grier
Sarah Hall
Julie Sayewich

Ms. Anne Cramer


FMPC 5000
Humber College
December 4th 2014

TABLE OF CONTENTS

EXECUTIVE SUMMARY............................................................................................................................#
MARKETING STRATEGY .........................................................................................................................#
PRODUCT STRATEGY .....................................................................................................................................#
PRICE STRATEGY ...........................................................................................................................................#
PLACE STRATEGY ..........................................................................................................................................#
PROMOTIONAL STRATEGY .............................................................................................................................#

BRAND PLATFORM....................................................................................................................................#
SECTION 3.1 ..................................................................................................................................................#
SECTION 3.2 ..................................................................................................................................................#
TARGET AUDIENCE...................................................................................................................................#
PROMOTIONAL MIX..................................................................................................................................#
SALES PROMOTION: DESIGNER COLLABORATION .........................................................................................#
FASHION EXTRA: WINDOW DISPLAY ..............................................................................................................#
PLACE STRATEGY ..........................................................................................................................................#

PROMOTION BUDGET ..............................................................................................................................#


EXPENSE BUDGET ..........................................................................................................................................#

CONCLUSION...............................................................................................................................................#
WORKS CITED .............................................................................................................................................#
APPENDIX .....................................................................................................................................................#
APPENDIX: WORKS CITED ............................................................................................................................#

Executive Summary
This report was commissioned to assess if a collaboration between Mackage and Hudson Bay
Company is a profitable venture to increase brand equity and sales. Eran Elfassy and Elisa
Dahan launched the Mackage label in Montreal in 1999. The Macakge down parka reestablished
the winter down parka for Canadians for a warm and functional outerwear without comprising
style. Mackage proposes an exclusive collaboration with Hudson Bay Company offering the
classic winter down parka with fur hood with the inclusion of the iconic stripes of HBC.
Research includes scholarly articles, newspapers and corporate documents. Based on the
findings, it is highly recommended that the collaboration is an attractive investment for Fall
2015 and improve both, Mackage and Hudson Bay Company, branding platform.
With Mackage and HBC business strategies aligned, the exclusive collaboration supports HBC
strategy to target the growing needs of Generation X and Y. Mackage brand reputation
continues to grow, since 1999, with numerous celebrity, television show and magazine
endorsements. Mackage presents one of the trendiest parkas for the season with the Hudson
Bay Company stimulates the Hudson Bay Company clientele with a designer winter parka at a
reasonable price point. Using promotional tools such as sales promotions and visual
merchandising techniques will attract the attention of our target audience. Publicity will be
generated through selling the Canadian winter experience to our customers in a fashionable
way. These promotional tools will further draw on the history of The Hudsons Bay company, as
well as the trend setting Canadian styles of Mackage, to illustrate why this collaboration will be a
success.
Research clearly denotes the exclusive collaboration as attractive line to incorporate within
Hudson Bay Company to promote brand equity and store sales.

Marketing Strategy
Product Strategy
Aligned with the business strategy, the product strategy targets one of the best sellers for the Fall
2015 Collection, the female winter down parka with fur hood. The combination of the fashionable
female outerwear and the iconic Hudson Bay Signature brand aims to showcase the product
strengths and improve the weaknesses. A key feature of the product design is the Textcote Nano
Down fabrication with proven superior quality down compared to other retailers. The Textcote
Nano Down provides a superior level of warmth with an elevated weigh-warmth ratio blend of
duck and feather between 80/20 and 90/10 (Technical Properties, 2013). This feature enhances the
performance and quality ensuring a practical and durable product for the unpredictable Canadian
weather conditions. It drives brand exposure internationally, strengthening the recognition and
resonation of the brand name. The breadth of products tailors to a variety of needs of the target
market optimizing the potent target market. In addition, Macakge accommodates different body
types by offering two size run options: XS/S- M/L and XXS to XL. The strengthening of the
specialty product brand position adds more customer value to the overall product strategy.

Textcote Nano Down


"Technical Properties." Mackage. N.p., n.d. Web. 17 Nov. 2014.

However, the product strategy weakens the customer service and branding are the restrictive return
policy and limiting product sizing. Mackages reputation as a brand with superior customer service
falls short to match the customers experience. The fifteen day return policy restricts the flexibility of
impulse buying, increases the hassle and feeling of betrayal. All merchandise purchase from other
retailers are subjected to the retailers return policy. With no stores in the Canadian market, the
Mackage return policy only implies to online purchases. Notably, customers incur all the shipping
costs at their expense, increasing the agony for product returns for customers. While this product
strategy protects the financial impact of rising returns, it potentially weakness the entire product
package expected by the customers. A poor development of an augmented product limits additional
features or benefits to exceed customer expectation. The dual size run options may accommodate
different body types, however it limits the customer base with the need for large product sizes. The
sizing of products only accommodates body types up to the size of XL.

Price Strategy
Following a demand-oriented approach, the prestige pricing strategy emphasizes the underlying
expected customer taste and preferences more heavily than the cost, price, and competition. The
designer price point suggests a higher quality, taste and status to customers. This strategy
strengthens the perception of the brands quality and connotation of a luxury status. The top price
point for mass-produced apparel, between couture and bridge price categories, upholding the
perception and expectation of high-quality fabrics and construction details and exclusive design.
The prestige price point average ranges from $750 to $1500 aggregating a niche market
segmentation. A niche market may be considered a weakness as it concentrates on a smaller area of
the market, however the deeper knowledge of needs achieves a strong marketing presence and

higher return of investment. The pricing strategy creates customers with a desire to purchase into
the brand for exclusivity, status and luxury experience.

Place Strategy
After designing and manufacturing, the companys different products are delivered directly to retail
outlets throughout the world based on pre-negotiated contracts and customer demand. The
contemporary brand is exclusively distributed to the most sought-after boutiques, department stores
and renowned online retailers in over twenty countries (Mackage). Through these retail
intermediaries, Mackages products are readily made available to the final customers. The channel
length is relatively short and is in fact a one-level channel. Shorter channels imply a more efficient
process and optimal final price for consumers. Furthermore to a growing international presence,
Mackage opened a flagship store in New York (Retail Insider, 2014). By utilizing multiple channels,
Mackage reaches different buyers for the same products through the flagship store, online and
retailers. A selective distribution strategy ensures smaller number of intermediaries and outlets than
maximum market coverage. Thus, Mackage products do not swamp the market and preserve a
luxury status.
Selective distribution strategy limits the in-store accessibility to Mackage products worldwide.
However, the inclusion of online retailers is the driving forces to counteract this weakness.
Electronic channels give the convenience to consumers to shop around with flexibility and speed. In
addition, Mackage builds databases based on customer visits, sales and feedback assessments to
continue to grow presence and reputation online.
Promotional Strategy

Mackage utilizes selective communication tools to create a memorable marketing program that
resonates with the customers and increases brand recognition. From trade shows to fashion shows,
Mackage strategically promotes the brand and products towards the Fashion Leaders, Innovators
and Influentials. Fashion shows are the key part of the industry to gain extensive media coverage,
raise public interest, build brand reputation and develop brand positioning successfully. The
collections for upcoming seasons are showcased at the Torontos largest fashion show, World
MasterCard Fashion Week. This fashion promotional tactic engages customers into the brand, while
indirectly soft selling of the runway collections. Mackage gains press coverage in fashion magazines,
newspapers and gossip magazines without the expense of advertising. Fashion magazines report on
the designer shows, seasonal fashion weeks, highlight fashion trends and celebrity endorsements.
FAJO Magazine states that Macakge has transformed the way North Americans bundle up.
Onscreen, on the runway and on freezing days, celebrities and fashion followers alike turn to the
brand to brace the cold in style (Eskins, 2012). This exemplifies dramatization characteristics of a
publicity communication tool. Medias high credibility ensures the coverage on the story behind the
brand and product resonates with readers. Notably, this communication tool offers an opportunity
to reach hard-to-find buyers who prefer to avoid mass media and targeted promotions (Keller,
Kotler & Sivaramakrishnan, 454). It is fundamental to expanding positive brand exposure
internationally.
In addition, Mackage utilizes the Internet to access customers via e-mails, who have registered a
membership online. This service automatically subscribes members to promotional electronic
mailing lists. It directly communicates latest products and special promotions to invite members,
entice a desire for the product, manage inventory levels, increase sales and strengthen customer
loyalty. However, the message can be lost if it causes antagonism by sending unsolicited e-mails to

the customers. With a two week processing delay to opt out of promotional emails, there is no
doubt that a major cause of resentment among Internet users (Mackage Privacy Policy, 2013).

Brand Platform
House of Mackage was intended to fulfill the North American outerwear markets need for trendy,
fashion forward jackets that are still very warm and practical for chilly winters. The brand, simply
known as Mackage has grown into one of the most prestigious outerwear brands in North America
with competitors such as Rudsak, Moncler and Soia Kyo who all compete for the same buying
dollar. However, Mackage remains competitive as a market leader by being the first company to
incorporate fashion trends into outerwear, and enlisting many followers. Mackage can be purchased
at Holt Renfrew, Saks 5th Avenue, Sporting Life, Aritzia, Harry Rosen, Mendocino and Hudsons
Bay. They opened their flagship store in 2010 in New York, New York. The store was opened in
New York instead of the co-creators hometown of Montreal because of the benefits that come
along with having a flagship store in such a densely populated fashion hub. Brand salience for
Mackage has been steadily growing with their popularity, particularly pertaining to the classic winter
down parka with fur hood used for this collaboration with Hudsons Bay.
The logo for the brand features the word Mackage with an embellished M at the beginning.
This logo is placed on the top of the hood of each jacket and is easily identifiable but not flashy, as
Mackage has positioned itself as a sleek and mature brand. The logo speaks to their Montreal roots
with its similarity to the fleur de lis.

Mackage uses social media to promote the brand esthetic. With over thirty-one thousand likes on
the Facebook page (Facebook.com/houseofmackage), Mackages social media presence continues to
grow strongly. This media channel promotes the newest products and events, including the link to
shop online. The Instagram page (@houseofmackage) features models showing off new collections
and celebrities styled in Mackage, which is mixed with street style pictures to showcase real
customers wearing the product. Many of these images are found from searching through posts from
followers that are uploaded with #Mackage and then featured on the House of Mackages page. The
use of celebrities gives fans something to aspire to and mixing this with street style also makes the
brand attainable. Mackage primarily promotes the brand image through instagram, as it is the most
visual. Mackage gives off an allure of a cool, trendy brand that is always fashion forward. Current
trending hashtags include #MackageFW14 to promote their current Fall 2014 collection and
#MackageFW15 to get followers interested in what is coming next. Mackage successful utilizes an
integrated marketing communications plan through their twitter account (handle: @mackage), which
links to posts from the Instagram account to allow for consistent delivery of messages about the
brand image, no matter which social media forum followers prefer.
Mackage built a reputation on the premise of combining style and practicality and has furthered
popularity among the fashion elite and fashion followers alike by staying true to the promise of
winter-ready coats with flattering cuts. Through the social media marketing and exclusive sales
position, Mackage has developed a very devout following. The jacket styles are very recognizable

and have even prompted other retailers to mimic the classic designs, making the puffer jacket
flattering for any shape while adding interesting hardware, fur and leather detailing.

PROMOTION PROPOSAL
Promotional Objectives

The IMC promotional plan proposes a collaboration with Hudson Bay Company (HBC) to offer an
exclusive line of female down outerwear. For Macakge, at which synergies across retailers have
traditionally been limited to things like using reputation and collective buying power, this would be a
new offering. HBCs power of department store counters wanes as the behemoths of American
department stores like Nordstrom and Saks 5th Avenue enter the Canadian market. With
promotional strategies aligned, this exclusive collaboration consolidates the iconic brand elements of
Hudson Bay, corporate stripes, with the unique design of Mackages classic winter down parka with
fur hood. With the ultimate goal to mutually increase brand equity, the collaboration targets to
increase sales for Mackage and Hudson Bay by targeting HBCs customer base with a notable stylish
designer jacket. Mackage presents HBC an opportunity to target their three-point strategy [through
creating a] fashion space [offering] exclusive brands and creates events to help redefine the
department experience [diversifying to a] younger style savvy millennials (Laird, 2014). The
recognition of value of HBCs competitive brand assets national reputation and awareness and
trademark- and brand strength- market leaders, customer loyalty and brand recognition- indicates
the likelihood of expected future earnings on the co-branding initiatives.

Mackage commits to achieve the following target goals with the implementation of this exclusive
designer collaboration:
1. Improve brand equity for HBC and Mackage

2. Increase sales in outerwear department at HBC


3. Promote brand awareness of Mackage in Hudson Bay Company
4. Boost social media coverage with trending hashtags: #MACKAGExHBC
#MACKAGECOLLAR #MACKAGEEXCLUSIVE

Target Audience
Over the last few years, Mackage has definitely increased in popularity becoming one of the most
well-known prestigious outwear brands in North America. The target audience for this particular
promotion with Hudsons Bay is women ranging from early 20s to late 40s with high disposable
income. The customer generally lives in or around a major city who cares about their appearance.
According to PMB, women spend on average $4,412 on coats alone and many are willing to spend
more money on quality outerwear with 2.8% shopping at the high end luxury stores (PMB 2014).
Furthermore, in Canada 10.1% of women apparel purchases are from HBC alone, supporting the
reasoning as the best retailer to launch this promotion.
Mackage jackets are designed for the cold Canadian winters. Therefore, an ideal location to launch
the promotion is in Toronto, a highly traffic area especially during the holiday season. Temperatures
in the city during the winter can range anywhere from -10 to -20 degrees Celsius. The winter down
parka provides superior level of warmth compared to other retailers that makes a fashion statement.
The target audience is fashion forward, whom stays up-to-date with the latest trends. With a worklife blend lifestyle, the winter down parka gives the flexibility and comfort for individuals, whether

commuting to work or school. This customer values quality, whom will invest in a staple outerwear
piece for winter for their daily. This early transition of lifestyle trends shift towards consumers
whom are extremely time-sensitive indicates an attractive market opportunity that remains uncapped
with few competitors. The winter down parka acts as an outfit itself without having to layer many
pieces of clothing, ideally saving time in the morning.
NORTH AMERICAN OUTERWEAR INDUSTRY INFOGRAPHIC

Basinalti, Larry. "Promotional Product Spotlight: Outerwear." Promo Products.



ASI: Advertising Specialty Institute, n.d. Web. 03 Dec. 2014.

Promotional Mix
MACKAGE X HUDSON BAY COMPANY proposal incorporates two promotional tools: a sales
promotion and a fashion extra.

I.

Sales
Promotion:
collaboration

Designer

The collaboration between Hudsons Bay and Mackage will first bring one of the most iconic
retailers in Canada, The Hudsons Bay Company, together with one of the trendiest and modern
outerwear companies in Canada, Mackage. The Hudsons Bay Company has been in business for
over three hundred and forty-four years, outfitting Canadians with a variety of clothing and
accessories since the 17th Century. In previous years, The Hudsons Bay Company has branded
themselves to reach the traditional Canadian man or woman, who seek basic work and casual wear.
However, HBC lacked the fashion forward edge that would capture one of the fastest growing and
wealthy cohorts, Generation X and Y. This generation is a by-product of Baby Boomers transferring
their savings and inheritances to their children, creating a class of individuals who are willing to
spend on the most trendy and technologically advanced products on the market (Marston, CNBC).
Furthermore, with the threat of retail companies such as Nordstroms and Saks Fifth Avenue
entering the Canadian market, HBC needed to make a change. They first began with rebranding
their logo, from very traditional yellow calligraphy lettering to a sleek, strong block leaders. HBC
also changed the connotation of the brand from simply being referred to as The Bay, to The
Hudsons Bay Company. Through formalizing their name they drew attention back to their heritage.
The creative director of HBC, Tony Smith explains, Were very proud to say that Hudsonss Bay is

continuing to advance in 2013, not only with our numerous new business ventures, but with our
updated lookWeve taken what is a very meaningful two-pronged approach to the redesign:
maintaining our heritage while modernizing the new Hudsons Bay Company (Infantry, Toronto
Star). It is changes like this that allow the Hudsons bay to succeed for three hundred years. As
illustrated, Hudsons Bay was willing and able to accept the changes that were necessary to capture
the upcoming younger demographic, which can ultimately be seen in their success today.
HBC ability to re-evaluate their target market, and rebrand themselves based on where they see the
fashion industry going, is remarkable. This is why Mackage believes that there partnership with
BHC, will help HBC further hone in on not only a younger generation, but a trend conscious
generation; their target market. A partnership between Mackage and HBC is unique because they are
both a Canadian company that make or sell clothing that appeals to the life of the Canadian man and
women. Mackage and HBC both embody and cater to the Canadian individual who experiences our
frigid winters every year. This collaboration would help the Canadian women brave the cold in style.
However, Mackage and HBC never want to compromise style. A winter coat is a specialty product,
therefore it is not always shopped for. It is a product that is purchased on occasion, and requires a
considerable time and effort to purchase. Mackage and HBC can make the shopping experience a lot
simpler for the customer, as there would be little effort and need to compare brands. Therefore,
Hudsons Bays long heritage in creating winter apparel, accompanied by Mackages ability to cater
to the trend conscious generation, in a warm and stylish way, will be reflected in the success of the
2015 Hudson Bay and Mackage Exclusive Winter Coat.
Using the traditional four Ps of the marketing mix, we will outline why this partnership would be
successful for both Mackage and Hudsons Bay. The first reason focuses on place. This limited
edition coat will only be offered in Canada at Hudsons Bays Flag ship story in the Eatons Centre in

Toronto, ON. We felt that by limiting its exclusivity, this will drive demand, making the product
much more exclusive and sought after. Individuals, who do get a chance to purchase the coat, will
only be able to do so if they purchase the product on November. Secondly, the winter coat, which
is the product, is exclusive to this one Hudsons bay location. The jacket will be offered in
Mackages traditional fit in beige and accented with Hudsons Bays traditional green, blue, yellow
and red stripes on the hood, cufs, as well as the inseam of the jacket. The product will be priced
slightly higher due to its exclusive style and once in a lifetime offer. However, VIP members, who
are the press, will receive a special VIP tag that when presented at the cash during the time of
purchase of the jacket, will also receive a free pair of Mackage leather gloves. Furthermore, we will
promote the product through creating a Hudsons bay window as well as offering this exclusive
jacket.

EXCLUSIVE WINTER DOWN PARKA WITH FUR HOOD

Top: The exclusive winter down parka with fur


hood exclusively at the HBC alongside the lining of
the inner zipper.

Left: Iconic HBC stripes to line the inner zipper
area.

II.

Fashion Extras: window display

The visual window displays at Yonge Streets Hudsons Bay have become one of the most highly
trafficked areas during the holiday season in downtown Toronto. HBCs windows are expertly put
together; creating an intriguing visual display will be the best way to get customers in the door to
check out and ask about the Mackage collaborative limited edition product. We want to increase
traffic in Hudsons Bay, increasing both retailers customers.
The display will be featured during the holiday season using a snowy Toronto landscape as a
backdrop. There will be two realistic mannequins on the left each wearing the jacket one walking
to work in professional attire and the other going to meet friends in a more casual outfit. This
showcases the versatility of the jacket. There will be sparkly snow all over the floor of the display
with a few oversized hanging wire snowflakes. A white Christmas tree will be to the right with silver
and gold ornaments and underneath the tree will be a collection of Hudsons Bay and Mackage
shopping bags. On the top left of the display will be Mackages custom logo in cling vinyl. The scene
will be very whimsical with warm lighting as well as cross lighting accenting the mannequins
featuring the jackets.
These promotional tools were chosen because they respected and reflected both Hudsons Bay and
Mackage as Brands. Mackage wanted to stay true to the Canadian winter experience, by creating an
exclusive outwear piece. Since Hudsons Bay stripes are immediately recognized, this will pay

homage to the history behind the brand. For example, Hudsons Bays history extends back to when
the first trading routes were established in Canada. The chosen colours have immense cultural
significance, specifically to Aboriginal peoples who were the first trading partners. These particular
colours meant something to the aboriginal peoples. For example, Green is taken to mean "new
life", red often stands for "battle or hunt", yellow relates to "harvest" and "sunshine" and blue
represents "water", (HBC Heritage). This history stays true to Hudsons Bay as a brand and enables
them to connect to their heritage.
Mackage chose to collaborate and make an exclusive product because this promotional tool is one of
the best ways to get the attention of HBCs target market. Often, collaborations are one of the best
ways to get the product in the hands of the target customer. Developing a sales promotion that
offers HBC and Mackages customers an exclusive offer will generate publicity. These jackets are
offered in a limited quantity, thereby increasing the demand. Through developing an inelastic supply
and demand strategy, Mackage believes that this promotion will attract the attention of our target
customer. Furthermore, Mackage chose this promotional tool, because our market assessment
shows that designer apparel has an compound annual growth rate of 120,000-140,000 million in
2012, indicating that is the fastest growing luxury goods category. Taking advantage of this growth
through providing exclusive sales promotions will aid in the success of this collaboration.
Furthermore, Mackage believes that your outerwear piece is largely your outfit throughout the winter
seasons. As a brand that was founded in Montreal, Mackage understands the need to be warm, but
also stylish. We decided to incorporate these stripes onto Mackages staple outerwear piece, their
winter jacket, which they have been widely successful in selling. We felt that keeping the colour of
the jacket beige, would cater to a larger demographic. When bringing these two brands together, we
wanted to offer our customers something unique and different. We wanted to tell a story with this

exclusive piece, a story that would capture a true Canadian winter experience. Incorporating each
brands signature touches allows the consumer to get the best of both worlds.
Mackages exclusive product maintains the integrity and the uniqueness of each brand. Aligned with
Mackages luxury status, the exclusivity and limited offer ensures an impulse buying reaction. Only a
few hundred will be sold at the Toronto Hudsons bay location.

Proposed Window Display

Top: A sketch of the


proposed window display
for HBC.

Promotional Budget
A window display promotion at The Bay window at the Yonge Street is ideal due to the historic foot
traffic the location has on a daily basis, specifically during the holiday season. The display will be
intriguing to the consumer with how the display is set up as well as the styling of our limited edition
jacket on the mannequins. You will see in the budget that the window display is a winter wonderland
theme, strategically focusing on the jacket. The second promotional tool will be our VIP pass for
special guests to come into Hudsons Bay a few hours before the opening to have an exclusive look
before other customers to purchase this limited collaborative jacket. These VIP guests will receive a
pair of complimentary leather gloves from the Hudsons Bay with purchase of the limited edition
jacket.
Based on the activities planned, the promotional proposal costs approximately $1,850.43.

Expense
Plastic Mannequin, Pose 1
Fibreglass Mannequin, Pose 2
Glitter Snow Decal (5pc, 4 oz)
Snowflakes
Silver and Gold Tree Ornaments
Gold
Gold
Silver
Silver
Artificial White Christmas Tree

Cost
$102.25
$165.22
$22.35
$19.99
$30.00
$3.00
$3.00
$27.50
$258.00

Clear Resin Filled Snowflake on Wire (4pc, 50 cm in


diameter)
Mackage and The Bay Shopping Bags
Cling Vinyl
Printed Graphic Backdrop for Visual Merc. Window

Supplied
$73.69
$349.95

Spot Light

$180.00

Printing of VIP Pass (50 pc)


Tax
Total

$94.12

$100.00
$241.36
$1,850.43

CONCLUSION
The strategic partnership between Hudsons Bay and House of Mackage will be mutually beneficial.
Collaborating with HBC will expose Mackage to higher volumes of traffic in the Toronto downtown
core. Mackages target audience is comparable to the customer that HBC is trying to draw into their
stores with their recent re-branding project. The promotional tools suggested in this report are the
limited edition product and the visual merchandising window display. The exclusive product brings
together visual aspects of both companies the classic winter down parka with the fur hood from
Mackage and the stripes in the Hudsons Bays colours. The window display engages consumers as
they walk by and encourages foot traffic into the store, therefore increasing sales. This partnership
will prove to increase brand awareness and sales numbers for both companies.

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APPENDIX

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"Mercury Glass Ornament - Silver, Set of 12." Pottery Barn. N.p., n.d. Web. 03 Dec. 2014.
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